August 11, 2011
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Beverage carbonation systems maker SodaStream International (Nasdaq: SODA ) lost its bubbles, dropping 41% in intraday trading today after disappointing guidance overshadowed better-than-expected earnings.
So what: Record non-GAAP EPS of 0.29 euros (equal to $0.42) for the second quarter was well ahead of the consensus estimate of 0.22 euros. GAAP EPS of 24 euros grew 41% year over year. Revenue grew 38% year over year to 53.3 million euros.
Now what: Management left guidance for the year unchanged, despite the 0.07 euro upside in the second quarter. That suggests it has moderated expectations for the company in the second half of this year. It didn't help that SodaStream raised guidance after reporting a strong first quarter three months ago. At yesterday's closing price of $68.81 the stock had a forward non-GAAP P/E ratio of 43 times. Investors are adjusting their earnings growth outlook downward ... and adjusting the stock price accordingly.
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